TAKING OVER A WEB SITE DESIGN PROJECT:

Potential Pitfalls for the Designer and the Site Owner

IVAN HOFFMAN, B.A., J.D.

It may happen that a site
owner becomes…what shall I say?.. disenchanted with a designer and wants
to change. You may be the designer number 2 that the owner wants to come
aboard. Shakespeare referred to stepping into the middle of a pile of …things
as in medias res. We understand the opportunities quite clearly.
But what are the dangers that you face in accepting the job?

And what if you are the designer on the way
out? What are your rights?

There are a couple of scenarios that we should
explore:

Scenario Number 1: The site owner has no written
contract with the original designer.

If the designer is a bona fide employee of the
site owner, then the entire work product of that designer done during and
in the course and scope of the designer's employment belongs to the owner,
even without a written agreement. (It is highly advisable however to have
all employees sign work for hire agreements, however.)

In the more likely case, however, the designer
is an independent contractor. The United States copyright law regarding
Work Made for Hire agreements is very specific in terms of the requirements
for a valid agreement. The work must fall into a certain category as set
forth in the statute and most importantly for the purposes of this discussion,
must be in writing, signed by the parties and executed before the
work is done. For more information on Work Made For Hire, read "Work
Made For Hire Agreements."

If there is no written and signed agreement,
either as a work made for hire or a license, then the site owner only obtains
a non-exclusive license to use the material on the site at best. In all
likelihood, no other rights get transferred to the site owner. The same
Copyright law provides that, absent a valid, written transfer agreement,
all exclusive rights remain with the creator of the material, in this instance
the designer. (I am here considering only material created by the designer
and not by the site owner and given to the designer for inclusion on the
site. There are many other issues here including the question of "joint
authors." For more information on this wrinkle, read "Who
Owns the Copyright In Your Web Site?" and "In Bed
Together: The Problems of Collaboration.")

The important issue in this regard is that
if there is no written agreement, and if the site owner only has the non-exclusive
right to use the designer's creative product on the web site, then the
site owner does not own enough rights to empower the second designer to
adapt, modify or otherwise use the creative material of the first designer.
So if the owner terminates the relationship with the first designer, the
owner may not have the right to allow the second designer to modify any
of the first designer's work.

When one person uses the protected material
of another, the second person is creating what the law refers to as a "derivative
work." Only the owner of the original copyrights and those acting with
his or her permission may validly create a derivative work in most circumstances.
This means that unless the first designer gives the second designer permission
to use and modify his or her work (an unlikely set of facts it would seem),
the use by the second designer of that material may be an infringement
of that first designer's work.

Scenario Number 2: The site owner has a written
contract with the original designer.

If there is a valid, written Work Made for Hire
agreement, it will likely transfer all rights to the designer's work to
the site owner, assuming the site owner is the other contracting party.
In such event, the second designer can obtain from the site owner the right
to adapt that protected material.

But there can be another form of transfer of
rights and that can be by a license of some or all of the rights of the
designer in the work. That license can grant all or only some of the rights
and with regard to those rights that are granted, there can be limitations
on use of the material. The answer to who owns what may come from reading
that agreement and perhaps an understanding of what the law provides. It
is only by knowing who owns what that the second designer can then know
what rights he or she is going to have in and to the material already in
existence.

One of the limitations that may exist is that
the site owner may not have the right to license others to use the material,
meaning that the site owner cannot grant the second designer any rights
to the material. The second designer cannot create a derivative work out
of that material even though the site owner has the right to use it on
his or her site. In other words, the owner may not own what the owner needs
to own to allow the second designer to use the work of the first designer.

What is the effect of a copyright notice on
the site? Answer: almost no effect for this purpose. (There are of course
many advantages to registering a copyright. For such further information,
read
"Do I Need To Register My Copyrights?") The
copyright notice may only apply to the site as a whole, meaning that the
site owner is the copyright proprietor in the site but not necessarily
the copyright proprietor every element on the site. There may be
material owned by the original designer that either is or is not copyrighted
but which is still owned by that designer and is subject to the hypothetical
examples above.

In short, reliance on the copyright notice
is completely misplaced and not advised. It does not convey enough information
for the second designer to rely upon in making some of these threshold
decisions.

CONCLUSION

There indeed are many other issues in this
predicament, with or without a written contract with designer number 1.
These issues may involve moral rights in the artwork, representations and
warranties from both the original designer and the site owner, use of third
party material that belongs to neither the original designer nor the site
owner, among other such issues.

It can be quite complex.

The best way to handle these issues is to enter
into a written web site design contract before the work begins with designer
number 1. It should set out all the rights and transfers of rights between
the parties. In the event that this is done properly, if and when the time
comes to change designers, not only may the site owner know where he or
she stands but the new designer can have some workable place from which
to begin the new work in relative security.

And of course the second designer must also
enter into a written agreement with the site owner that covers all these
as well as other issues.

Without such a writing, the designer and site
owner leave themselves open to the vagaries of the Copyright law which
has not yet found completely solid footing on the very slippery sands that
are the Internet.

This article is not intended as a substitute
for legal advice. The specific facts that apply to your matter may make
the outcome different than would be anticipated by you. You should consult
with an attorney familiar with the issues and the laws.

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